US GOVERNORS JOIN INTERNATIONAL CARBON ACTION

C O N F I D E N T I A L SECTION 01 OF 02 LISBON 002755 SIPDIS SIPDIS STATE FOR: E/B; PA/IGA; WHITE HOUSE FOR CIEQ E.O. 12958: DECL: 10/30/2032 TAGS: ENRG SENV EUN PO SUBJECT: US GOVERNORS JOIN INTERNATIONAL CARBON ACTION PARTNERSHIP Classified By: DCM DAVID BALLARD, REASONS 1.4 (B) AND (D). SUMMARY -------------- ¶1. (U) The International Carbon Action Partnership (ICAP) was launched on October 29 in Lisbon by a coalition of European countries, the EU Commission, US states, Canadian provinces, New Zealand, and Norway. The inaugural event included a signing ceremony followed by several technical workshops. During the ceremony, all parties expressed their commitment to the project and emphasized carbon markets as the only efficient mechanism for increasing the compatibility of carbon reduction and economic growth. In addition, the US participants noted the absence of the US federal government in this initiative and underscored EU leadership on the issue. HIGH LEVEL ATTENDANCE UNDERSCORES IMPORTANCE OF PARTNERSHIP -------------- -------------- ¶2. (U) More pomp than substance, the inaugural ICAP event was attended by several high level officials, underscoring the importance that the member countries and regions place on the initiative, which provides a forum in which governments can share best best practices on the design of emissions trading schemes and work toward the development of a global carbon market. Leaders attending the ceremony included: President Jose Socrates, current President of the Council of the European Union and Prime Minister of Portugal; European Commission President Jose Manuel Barroso; Governor Jon Corzine, New Jersey; Governor Eliot Spitzer, New York and Premier Gordon Campbell, British Columbia. Linda Adams, Secretary for the California Environmental Protection Agency, SIPDIS represented Governor Schwarzenegger, although both Schwarzenegger and UK Prime Minister Gordon Brown participated via video message. In addition, Finance Minister of Norway Kristin Halvorsen, and representative delegations from France, Germany, Greece, Italy, Ireland, New Zealand, the Netherlands, and Spain were also in attendance to sign the agreement. ¶3. (U) Governors Corzine and Spitzer represented the Regional Greenhouse Gas Initiative (whose members include Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, Vermont, and Maryland) and Governor Schwarzenegger's delegation represented the Western Climate Initiative (whose members include Washington, Arizona, New Mexico, California, Utah, and the Canadian provinces of British Columbia and Manitoba). Both the RGGI and the WCI are in the process of creating regional cap and trade programs to reduce carbon dioxide emissions. COMMITTMENT TO CARBON MARKETS, NEED FOR INCREASED PARTICIPATION -------------- -------------- ¶4. (U) During the ceremony, all parties expressed their commitment to the ICAP initiative and reiterated the role carbon markets will play in combating global warming. They noted that a cap and trade emissions system is key to ensuring the compatibility of carbon reduction and economic growth by forcing companies to internalize the cost of climate change, encouraging new clean technologies and environmentally sound behavior, and creating a financial flow to aid developing countries in adaptation and technological development. In addition, speakers agreed that the success of an emission trading scheme is directly correlated to the number of participants. They, therefore, endorsed ICAP's goal to increase the compatibility of current regional carbon markets and eventually establish a well-functioning global cap and trade carbon market. During their presentations, all three US governors placed special emphasis on the need for increased global participation, specifically expressing their disappointment that the U.S. federal government does not support a nation-wide cap and trade emissions scheme. They praised the EU's leadership on this issue and indicated that the current European Emissions Trading Scheme had provided the world with a crucial blue print for the establishment of similar systems. LOOKING AHEAD -------------- ¶5. (U) Barroso stated that the ICAP initiative sent a much needed message, prior to the UN Framework on Climate Change meeting in Bali, that world leaders can work together and take bold action toward a global low carbon economy. He reiterated the EU's commitment to the initiative's goals and the special responsibility of developed countries to take the lead on climate change. In addition, he invited all LISBON 00002755 002 OF 002 participants to attend the first ICAP public workshop in Brussels in 2008 to formulate action plans. Socrates gave the final speech in which he praised the formation of ICAP as a launching pad to future action on climate change. He underscored the need for a technological revolution, one sparked by incentives laid out in carbon trading schemes. He also expressed the EU's hope that the upcoming meeting in Bali will be successful in establishing a clear roadmap and legally binding emissions targets, which he deemed necessary for the credibility of the UN process. Socrates also reiterated the EU stance that the UN is the only forum capable of tackling such an enormous global problem. ¶6. (C) COMMENT: Several of the references to the lack of U.S. leadership on climate change and, particularly the formation of carbon markets, were more opaque than others. Socrates, for instance, while not openly criticizing other endeavors--such as the MEM process--made it clear that the the EU sees the UN Framework as the ideal forum in which to tackle climate change. Note also that Ambassador Hoffman hosted all three US delegations to breakfast prior to the event where they discussed the need to increase the use of nuclear energy in the fight against global warming. Hoffman